"It is going to be hard for some governments to overcome and that to me is the biggest obstacle to the merger is the potential loss of workforce in the European home countries. But the reality is that these countries were going to be facing these losses already. BAE already announced significant cuts in the United Kingdom."

The super merger would see EADS and BAE Systems join forces in a company worth around 38 billion euros.

It's suggested the new venture could be called Airbus.

But that name is unlikely to be welcome in the United States as it would directly challenge that country's aerospace and defence giant Boeing.

"I think the biggest concern I would have towards this deal is that some of the American defence companies would see this as very threatening to them, that potentially it does give EADS and the combined BAE Systems company a great toe-hold into the American marketplace so I see it political obstacles much more than the security obstacles that exist."

It's unlikely the negotiations will be protracted.

Sources close to the talks told Reuters that EADS and BAE Systems would rather scrap the deal than make wide-ranging concessions.

The next three weeks will see frenzied discussions.

BAE and EADS have until October 10 to decide whether to pull back or proceed with the deal.